inflation model, when used to explain inflation persistence. Indeed, virtually all inflationary dynamics end up being captured … model (i.e. lagged inflation) and that the SPI model overemphasizes inflationary persistence. Thus, there appears to be room …" inflation persistence …

the standard difference equation (DE) form, current inflation is a function of past inflation, expected future inflation …, and real marginal costs. The alternative closed form (CF) specification explicitly solves the DE form to express inflation … as a function of past inflation and a present-discounted value of current and expected future marginal costs. The CF …